摘要：In many countries, Employment Protection Legislation (EPL) establishes different regulations
for certain groups of workers who face more disadvantages in the labor market (young
workers, women, unskilled workers, etc.) with the aim of improving their employability.
Well-known examples are the introduction of atypical employment contracts (e.g., temporary
and determined-duration contracts) which ease firing restrictions for some, but not all,
workers.
This paper discusses the effects of EPL varying among workers of different skills on
the level and composition of unemployment, job flows, productivity and welfare. By using an
extension of Mortensen-Pissarides’ (1994) search model where heterogeneous workers
compete for the same jobs, we are able to identify several key channels through which
changing firing costs for some groups of workers affects hiring and firing of all workers and,
hence, may have a different impact on aggregate labor market variables than reducing firing
costs across the board. Some analytical and simulation results also show that these effects of
differentiated firing costs by workers’ skills may be different depending upon the initial state of
the labor market.
